Penticton city council pulls from reserves to reduce the proposed 8.5 per cent tax hike to 5.7%. (File photo)

Penticton city council pulls from reserves to reduce the proposed 8.5 per cent tax hike to 5.7%. (File photo)

Penticton council to pull from reserves and reduce this year’s tax hike to 5.7%

Council votes to delay 3 per cent of 8.5% tax hike to 2023

After extensive debate, Penticton council voted 6-1 to reduce 2022’s tax increase to 5.7 per cent instead of the initially presented 8.5 per cent.

The electrical utility costs won’t change either for 2022.

Only Mayor John Vassilaki voted against the 5.7 per cent increase, having proposed a steeper reduction that was rejected by the rest of council.

For the average property of $469,909, that will result in a total increase of $103, with $80 from the change to municipal property taxes. For the average business, worth an assessed $1.19 million, it will result in a total increase of $934, with $802 coming from municipal taxes.

With the zero per cent increase to the electrical utility, the city will be expecting a $421,778 drop in the surplus. It will be the sixth year, since 2017, that electrical utility rates will not increase.

READ MORE: $4.3M in facility upgrades in Penticton’s 2022 budget

Instead of the higher taxes in 2022, the city will be pulling out three per cent of the general reserve, or $1.1 million.

It’s not an elimination of the tax hike, but a delay for a year as noted by the city’s general manager of finance Jim Bauer.

“Taking from your reserve is not a sustainable source of funding,” said Bauer. “That $1.1 million will have to be found in next year’s budget. You’re essentially deferring the three per cent increase into next year alongside inflationary pressures and anything else.”

Mayor John Vassilaki had proposed an even steeper reduction to the tax increase, by pulling even more instead for a 3.5 per cent increase.

That proposal set Couns. Campbell Watt and Katie Robinson a bit on edge, and in the end Vassilaki’s proposal was voted down.

Robinson pointed to how council and the city had pulled from reserves in 2019 and 2020 already to reduce tax increases for those years as well.

“That is just not sustainable, at all,” said Robinson. “If you’re not keeping up with inflation you’re going in reverse, and to me that means cuts. Really severe cuts that another council is going to have to deal with if we push this off another year.”

The budget, as approved, includes the funding for the additional bylaw and three RCMP officers for 2022.

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